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Market Share and Margins Up, Says New Study

December 20, 2010

FORT LAUDERDALE, Fla. — The latest study conducted by AutoUSA reveals that 94.2 percent of dealers increased market share in 2010, and more than 70 percent reported an increase in new-car margins.

Dealerships that gained market share this year attributed the growth to improved customer service (69%), friendly process (65%), best reputation (52%), quick process (45%), lowest price (29%) and best selection (28%), according to the study.

“Although 2010 has been a challenging year for auto sales, it appears the economy has inspired dealers to provide customers with better all-around service, which has proven to be more effective for closing new business than just price alone,” said Phil DuPree, president of AutoUSA. “In addition, the survey indicates that dealers spent the majority of their ad budgets on Internet marketing strategies in order to draw more customers into their stores.”

The survey found that 94.2 percent of dealers distribute their new-car inventory to Internet sites and 54.7 percent of respondents say they plan to increase their purchase of third-party leads in 2011. When asked which part of their business did best in 2010, 41.8 percent of dealers reported new-car sales, while 28.4 percent said used-car sales and 28.4 percent said service.

In addition to inventory exposure and purchasing third-party leads, the survey found that many dealers are actively involved in online reputation management. More than 85 percent of survey respondents say their dealerships manage online reputations by following up on consumer opinions posted online, with 62.3 percent saying they have a well-managed program and 23.2 percent saying their program is not well managed and they only follow up on a limited basis. Using sites like DealerRater, Edmunds.com and Yelp for online reputation management is an effective way to leverage third party leads by increasing chances that a prospective customer will submit a lead to a particular dealership based on positive user reviews.

The online survey, which was conducted in November, generated 71 responses from dealership employees around the country, including store owners, general managers, business development center managers, marketing managers, Internet and sales managers.

To view the full survey results, click here.

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